Author: Robert1958

Taking a long term view to your investments

Taking a long term view of your investments means not panicking if the markets are done a bit because if  you hang in there, you are able to take advantage of the swings and roundabouts in the markets. If you were investing directly into the sharemarket and have invested all your money in one stock then you have placed all your eggs in the one basket, and the odds are that you may lose the lot if the company which you have trusted with your savings goes bust.

The beauty of kiwisaver is that all the investments of everyone who is part of of New Zealand’s retirement scheme is  combined and invested in a wide range of companies. This minimizes the risk of losses should there be a market crash but there is nothing one can do about it therefore it is best not to be concerned about something that is out of your hands.

When you are a young 20 or 30 something investor, you have more time to recover from a market crash than someone in their 50s or 60s. Some financial advisors would advise those approaching retirement to take a more conservative approach to investing because taking a financial hit late in life could affect one’s retirement plans.

The markets are driven by fear and greed. When the markets are going down many people sell for fear of losing their money. What these people fail to realize is that the markets can go up as well and very often the sellers are missing out on the gains which would have been available if they just hung in there. If they are so worried about losing their money in the markets then it is not a place that they should be investing there money in.

The astute investor can take advantage of the lull in the market for when the market is down, it is time to buy and let time be your friend.

Having said all of this, you have to have some kind of goal for your savings. Are you saving for a house deposit, retirement, overseas trip, to finance a business? Establish the “Why” and you will end up with some kind of goal for your savings.

This post is the opinion of the writer and is not intended as financial advice. If you are unsure of where to invest your savings, seek independent financial advice.

www.robertastewart.com

 

 

I will be off the internet until Tuesday so if you have ordered any ebooks, I will not be able to send them to you until then. Sorry for the delay.

Bob

If its too good to be true-It almost certainly is

We have hard these words so often by those warning us to beware of scammers yet so often we hear of intelligent people being scammed of thousands of dollars and in extreme cases tens of thousands. Commonsense seems to go out the window when intelligent people get taken in by these rat bags. In a recent case, a New Zealand man in his late 50s whose job title was a cleaner aoppeared in the Christchurch District Court for his part in a ponzi type of scam where over $8 million was invested by 900 people in a fake foreign exchange scheme.

Many invester’s felt that everything was above board because the company involved weas registered on the Financial Service Provider’s Register however the cleaner was charged with obtaining registration as a financial service provider by deception.

A tradesman who had lost everything he put into the scheme commented that the investment appeared too good to be true and that he was afrauid of missing out on such an investment opportunity. A friend of the tradesman who had got him into the scheme later told him it was a scam but only after they had both lost the money they invested in it.

What happened to the money is a commonly asked question in similar scams and in this situation, none of it went into any legitimate forex trading platform or other invstment as had been promised by the company. Instead the defendant used part of the money as a deposit on a $3.5 million Christchurch property and $111,000 on a BMW.

I think there is a clear lesson here. Good money manager’s live a modest lifestyle and would you take financial advice from someone who drives a flash car? It hard to believe that people like this are able to relate to those who managed to save and invest money from their modest incomes. At the end of the day it is up to everyone to take responsibility for their own finances and use their commonsense, something that tends to go out the window when people are enticed into money making schemes promising easy riches.

Feel free to share and print to post.

www.robertastewart.com

Debt-a dirty word for the financially literate

“The borrower is a slave to the lender.” Proverbs 22:7

If you don’t have the money you don’t buy it is a quote I once heard from a church leader and he is right. Debt is a cancer on the financial health of people and just like physical cancer, the cure is often painful and requires a change in behaviour. It is all very well to keep your debt under control but you must learn to live within your means if you are able to. If the books make terrible reading then you still must do something about it such as seeking financial advice and going to a budget advisor.

Credit card spending is one of the main causes of debt because it makes credit easily available. Once you have convinced your bank of your credit worthiness you are virtually guaranteed a credit card. All the bank is concerned about is making a profit. They are not concerned that you are getting in debt and if you get behind in your credit card repayments, the interest rates really bite hard.

It is not just those on modest incomes who are in possession of a credit cards. Those on medium and high incomes use them as well.

So what does this tell you?

It tells me that what motivates people to use credit cards is greed and selfishness. It is the “keeping up with the Joneses” mindset. Some people spend their whole lifes trying to keep up a persona, that is keeping up a self-image just to impress others. That nice car or expensive house house may impress others but at the end of the day if it is bought with borrowed money then it will result in the borrower’s life being ruled by the lender.

Many people are pennywise but pound foolish! They take note of all of the bargains and will purchase one item over a competititor because it is 10p cheaper yet would think nothing of purchasing other stuff on credit and paying interest on it which means they are paying a higher price for everything bought on credit.

It is important to live by your own financial objectives and circumstances. In short: Stop being a people pleaser and be yourself!

The information here is the opinion of the writer. If you need financial advice then ask your budget or financial advisor. Feel free to pass on, share, and print this post.

www.robertastewart.com

Working out your risk profile

Investing money has its risks if you are prepared to go for growth but even though you may not have the stomach to take on risky investments

The main one is to diversify. That is to spread your portfolio over a wide range of industries. This is possible for the ordinary man and woman in the street who are able to invest in managed funds where your investment is combined with those of others. It is then up to the fund manager to handle all of the investments. This is exactly how kiwisaver operates.

Each fund will give you an option of investing in Conservative, Balanced, or GRowth funds and your decision of which fund to leave your money in will be determined on whether you can stomach heavy losses should the sharemarket go bellyup. If the though of losing your money will cause you sleepless nights then you should go for balanced funds. Conservative funds will not grow your money if at all once the fund manager withdraws their fees that you may have better options though in the case of kiwisaver, the government will contribute 50% of what you put in to a maximum of $520 per annum so at least this would make it worthwhile.

Your risk profile is not the only determining factor in deciding which fund to choose. If you are saving for a deposit on a home then you are not going to want to risk losing your money in the sharemarket which will happen if you had all of youer money in Growth funds only for the markets to tumble.

Your age is another factor to consider. When you are young, it is advisable to go for growth funds because you have more time to recover should the markets go down whereas someone nearing retirement would have their retirement plans affected should this occur.

It is your money however and your own responsibility to decide where you are going to invest so learn all you can about the various types of investments and in time you increase your financial literacy.

The information given here is my own opinion and not given as financial advice.It is best to seek professional financial advice if you are unsure.

www.robertastewart.com

Amazon Tax introduced to NZ

A new tax has been introduced to New Zealand where purchasers are required to pay goods and services tax on goods bought from sites such as Amazon. Previously any goods valued at under $400 NZ were exempt from tax.

Goods and Services tax or G.S.T as it is called is 15% of the value of the goods but apparently the postage paid on the item will be taxable as well. I don’t know about others but whenever I have bought stuff on Amazon I had to pay $25 NZ postage which means an extra $3.75 is payable in G.S.T on the postage alone never mind the value of the book.

The overseas websites are required to register for G.S.T but those that sell less than $60,000 NZ worth of goods to NZ per annum are exempt.

I’m not sure how this tax applies to books bought overseas and brought back home with your luggage. In due course we will see how all this unfolds.

This new law is designed to level the playing field because local retailer’s are suffering with the volume of online shopping. I think if Amazon set up their F.B.A service in New Zealand then physical retailer’s will really have something to worry about. FBA stands for fulfillment by Amazon.

ABOUT AMAZON FBA

Here is how it works. You source items to sell at Amazon. This may be from ebay or in our case trademe and put your markup on it to sell at Amazon FBA. Amazon will collect your goods for you for delivery to their warehouse. I do know of one or two people in the UK who source products for Amazon FBA by going through the websites of high street stores and sourcing products that way.

If you are in a country where you can do this then it is worth a try. I will just have to wait and hope that Amazon do set up a warehouse in NZ as well so that I can  jump on the bandwagon as well.

robertastewart.com.

Ditch those excuses

People come up with all kinds of excuses why they are not part of a retirement savings plan even though they can afford it. You can understand someone who is struggling to feed a tribe of kids on a modest income not being able to afford to join a retirement scheme but you do hear of people from time to time saying that they are not enrolled in one. New Zealand’s scheme is called “Kiwisaver” and I have heard a lot of different kinds of excuses as to why people are not enrolled. Here is sample.

“I am not earning enough money.”

The person who made this excuse has money to spend on a lot of other things such as Sky TV subscriptions and all of the other consumer able items that are not essential to survive.

“I have bills to pay.”

This one is similar to the previous excuse. People are quite prepared to purchase stuff with borrowed money but apparently think “Financial advice” is a dirty word.

“I might die before I retire.”

The person who made this statement does have a kiwisaver account but is an irregular contributor and is not making the most of it. He is missing out on the government tax credits. Yet is spending money on collectable items which he has stored up in the attic. That could be his retirement fund. He may not take his retirement fund with him but will not take his collectables with him either.

The “You can’t take it with you” excuse is one of the most common excuse given for not saving for one’s retirement. It is basically a selfish attitude to have since you are going to lumber your family with a big bill when you die.

“The Government might sell kiwisaver.”

This is the most stupidest reason for not going into kiwisaver because kiwisaver is the name given for New Zealand’s retirement scheme. It is not owned by the government. Each person who has kiwisaver is the owner of their own account.  I tried to explain this but the person who made this comment instead of listening then confided in his colleagues who were just as financially illiterate and  they came out with more stupid comments. That just goes to show that people tend to hang out with those who are like minded. If you want to get ahead then associate with those whose lives are heading in the same direction as you want to go.

 

Funeral Insurance. Do you really need it?

The opinions expressed in this post are my own and may not be applicable to your circumstances therefore it is suggested that you talk things over with your own family if you are unable to make your own decisions.

You must have seen the TV adverts selling funeral insurance so that you are covered if something unexpectedly happened to you. I do not have this kind of insurance but I do know others who do. Yet these people are not with kiwisaver, New Zealand’s retirement scheme. Now, I do not know how much they are paying to these insurance companies every week but I suggest that if they cut out the insurance and instead invested that same amount of money into their kiwisaver account then they would in the long run be better off financially providing of course that they do not die in the forseeable future.

Now let us suppose for the sake of explaining things that they are paying $10 per week or $520 per annum in funeral insurance. If this money was invested in kiwisaver instead and along with the government’s contribution of 50% of their contribution would mean that there would be $780 in this person’s kiwisaver account. If this was repeated every year then there would soon be sufficient money in the kitty to pay for insurance.

Do you see where I am coming from?

It is something to think about but as I stated at the beginning of this post, this is my own opinion and may not be applicable to your circumstances.

www.robertastewart.com

Saver or Investor which one are you?

Most people are able to save money. It is just a matter of spending less than you earn but few people are investors. If you have say a grand or two in an ordinary on call savings account then you are not making the most of your savings. An ordinary savings account will only pay around 1-2% interest which is not much more than the inflation rate. On top of that, you have taxation to pay on the interest. In the end, it is no way to grow your savings. The bank is really using you and your money to get rich. They charge their borrowers a much higher interest rate than they are paying for the use of your money and to rub salt in the wounds, the bank’s best customers, those who borrow money for their businesses recoup the money they paid for the use of your money by charging you a higher price for the goods and services they provide.

There are plenty of options for investing your money and no excuse for burying your head in the sand. The banks do have fixed term options at higher rates for those who have a lot of savings. The minimum investment for these is usually around 5k upwards.

Managed Funds are a good option for those who want to grow their savings at a faster rate. It is a good way of investing indirectly into the sharemarket. your investment is combined with all the other investors who have joined the scheme and the fund invests in the markets. You do have the option of which fund to invest your money such as conservative, balanced, or growth.

It pays to do your homework irrespective of where you invest your money. I think the factor which determines the risk level you are prepared to accept is how soon is it that you need your money. If you are saving for a house deposit then you certainly would not be investing your money in high risk investmennts because when it comes to using your money, the markets may have taken a dip, otherwise known as a “Bear Market.”

It is all a matter of increasing your knowledge. I have an ebook “The Golden Rules of Wealth.” which can help change the way you think about wealth. It is only $5. Check it out now.

www.robertastewart.com

How to Gain 50% on Your Investment

Did you know that investor’s in New Zealand’s retirement savings scheme Kiwisaver earn 50% on their investment for the first $1040 they deposit into their Kiwisaver account every year?

Now you may be thinking, “Its too good to be true so it must be a scam.”

Read on.

The government will deposit a maximum of $520 into your Kiwisaver account per annum. To receive this full amount you must deposit $1040. In other words whatever you deposit into your Kiwisaver account the government will invest 50% of it into your account. This is in real terms 50% of on your investment.

The news gets even better. It is all tax free.

If you only worked part of the year or are on a low wage and are unable to contribute the full $1040 on your wages then you are able to make voluntary contributions into your Kiwisaver account.

It is worth noting that the Kiwisaver year begins on July 1st and ends on June 30th. The government money will go into your Kiwisaver account in late July. So the strategy is to always make sure that you have deposited $1040 into your Kiwisaver account by June 30th to get the full amount of government money in July. If you do banking over the internet then it will be just a case of making a transfer to your KIwisaver account in much the same way as you would when transferring money between accounts.

This is all applicable to New Zealand’s retirement scheme only. Your own country will have its own scheme with it’ own incentives.

www.robertastewart.com